Pramod Mittal in talks to sell Bulgarian mill Kremikovtzi
Pramod Mittal, younger brother of Lakshmi Mittal, is in talks to sell Bulgarian steel mill Kremikovtzi to Ukraine’s Konstantin Zhevago.
By Bloomberg |
SOFIA: Pramod Mittal, the younger brother of steel billionaire Lakshmi Mittal, is in talks to sell Bulgarian steel mill Kremikovtzi to Ukraine’s Konstantin Zhevago, the plant’s chief executive officer said.
“The talks are being held in London,” Kremikovtzi CEO Alexander Tomov said in an interview with Bulgarian state television channel in Sofia Friay. “An agreement might be reached today or tomorrow.”
Pramod bought 71% of Kremikovtzi for an undisclosed price in 2005 through his Dubai-based Global Steel Holdings. The company sold E325 million ($481 million) of 12% bonds due 2013 to pay off liabilities to the Bulgarian government, fund capital spending and supply working capital.
Calls to Pramod Mittal’s office in London for comment weren’t immediately returned.
Kremikovtzi missed an annual earnings target of $130.5 million and posted a 72 million-lev ($54 million) loss in the third quarter of 2007. Pramod Mittal initially pledged to invest $340 million to modernize the plant and help it meet European Union environmental safety requirements. The plan hasn’t been implemented.
“The talks are being held in London,” Kremikovtzi CEO Alexander Tomov said in an interview with Bulgarian state television channel in Sofia Friay. “An agreement might be reached today or tomorrow.”
Pramod bought 71% of Kremikovtzi for an undisclosed price in 2005 through his Dubai-based Global Steel Holdings. The company sold E325 million ($481 million) of 12% bonds due 2013 to pay off liabilities to the Bulgarian government, fund capital spending and supply working capital.
Calls to Pramod Mittal’s office in London for comment weren’t immediately returned.
Kremikovtzi missed an annual earnings target of $130.5 million and posted a 72 million-lev ($54 million) loss in the third quarter of 2007. Pramod Mittal initially pledged to invest $340 million to modernize the plant and help it meet European Union environmental safety requirements. The plan hasn’t been implemented.
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“I am confident the new buyer will help Kremikovtzi recover,” Tomov said. “The plant was on the brink of collapse last year. It should not be left in this state. Cleaning up its production is our top priority.”
Zhevago, a billionaire Ukrainian lawmaker and owner of financial company Finance and Credit, is ‘close’ to Oleg Deripaska, Russia’s second-richest man, Tomov said. Kremikovtzi pays 110,000-lev fines to the government each month for exceeding pollution levels.
Tomov said investment in the plant completely stopped in the last five months of 2007 after Sofia’s Mayor Boiko Borissov proposed the closure of the plant, which employs 8,000 people, and the sale of the land to developers.
The government, which controls 25% of Kremikovtzi, said in December that the plant was vital to Bulgaria’s economy and can’t be shut. Tomov said losses were incurred after freight costs almost tripled and iron-ore prices jumped.
Kremikovtzi changed suppliers and imported all its raw materials from Brazil and the US, in line with Global Steel company policy, he said. Kremikovtzi’s metal ore was previously supplied from nearby Ukraine and Russia at a lower cost, Tomov said.
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Global Steel owns India’s fifth-biggest steelmaker. It has production facilities in the Philippines and Nigeria and a coke-oven company in Bosnia. It holds concessions to operate plants in Libya and Nigeria.Download
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